Know everything about GST Invoice Bill

Implementation of the Goods and Services Tax (GST) is probably one of the most significant tax reforms our country has seen, and there have been many discussions on the topic ever since.

Some of the prominent queries here can be surrounding the GST invoice bill – the building block of this tax system. Here we provide a brief insight into what this document is and the several guidelines involving it. Read on!

What is the GST invoice?

If you are a GST-registered business, you are probably familiar with what a GST invoice is. However, for all the customers, here is a quick brief.

A GST-compliance purchase invoice contains the details of the parties involved in the mentioned transaction and lists all goods and services sold, with their prices. This bill also displays the percentage of discounts and taxes charged on each item, besides other details.

Do all businesses need to issue GST invoices?

A GST invoice must be issued without fail by businesses that hold a GST registration. Other enterprises, however, do not need to issue these particular invoices.

Mandatory fields in GST invoice

Here is a list of particulars that must be present in a GST tax invoice specified under Rule 54 of the CGST Act of 2017.

Name, GSTIN, and address of the supplier
Invoice number
Date of issuance
Invoice type
Shipping and billing address
Name of the customer
GSTIN of the customer if registered
Details of products and services provided, including description, quantity, etc.
SAC code or HSN code
Rate of CGST, IGST, UTGST, and SGST charged
Total tax amount and discounts, if any
Reverse charge
Signature of the invoice issuer

Here, have a look at how it looks on paper.

Now you might be wondering if it is necessary to enclose every single of these details in a GST invoice bill. Well, it is mandatory when there are laws to enforce it.

GST tax invoice rules

When following the above guidelines in terms of invoice contents, issuers need to consider certain rules that specify the “what” and “how” of these details.

GST invoice serial number rules

Following are the mandates that issuers need to follow as per Rule 46 (b).

The invoice numbers must be sequential or consecutive.
They must be unique for a financial year, containing an alphanumeric combination.
A serial number must not exceed 16 characters.
GST should be split into CGST, SGST, and IGST. It must not be charged as a whole.
In the case of any transactions made outside the issuer’s state, a separate tax called IGST has to be charged. On the other hand, SGST and CGST should be charged against sales within the same state.

GST invoice signature rules

The CGST rules make the issuer's signature one of the mandatory fields in a GST invoice. Specifications of a valid signature are as follows.

The bill can be signed by hand or digitally, provided it is affixed as per the mandates of the Information Technology Act, 2000.
The GST invoice bill must be signed by the supplier or his/her authorized representative.

As per section 116 (2), his/her ‘authorized representative’ can be a company secretary, a practising advocate, a chartered accountant, a retired officer of the Commercial Tax Department, or a regular employee appearing on the supplier’s behalf.

GST invoice payment rules

Another mandate under the CGST Act concerns a scenario where a GST-registered individual makes purchases from a seller who is not registered. There can be 2 cases here.

If the registered individual buys from an unregistered entity, the former has to issue a tax invoice.
If the registered individual receives supplies exempted from GST, he/she needs to issue a bill of supply instead of an invoice bill.

Now, you might be wondering that it might get difficult to always issue an invoice following such extensive guidelines right upon purchase every time.

To ease this process, the Indian government has also provided outlines regarding the time of issue of invoice under GST.

When to issue a GST invoice?

The time limits vary depending on the type of supply. Here is a brief guide.

For goods

Normal supply: In such cases, the GST invoice bill must be issued on or before the purchased item’s removal. Removal is defined under Section 2 (96) of the principal Act as directly collected by a recipient or dispatched by the supplier for delivery.
Continuous supply: Here, the date of issue of invoice under GST must be on or before receiving payment or the generation of the account statement.

For services

General case: The issue of invoice under GST must be done within 30 days of rendering such services.
Financial services: For services provided by banks, NBFCs, and other financial institutions, the last date of issue of invoice under GST is the 45th day from the date of service supply.

That was all about the important rules and regulations regarding tax invoices. Now, this is not the only type of invoice in practice.

Want to know about the other prevalent types under GST?

Keep reading.

What are other types of invoices under GST?

Here is a list of the other types of GST invoices besides a tax invoice.

Bill of supply

The only difference between a bill of supply and a tax invoice is that a 0% or no GST is charged in the former. Therefore, this type of invoice can be issued in 2 cases.

When a GST-registered supplier has chosen the composition scheme.
When a GST-registered supplier is dealing in exempted services and goods.

As a result, the recipient does not have the provision to claim an input tax credit based on this document.

Also, a registered entity can issue an all-encompassing invoice-cum-bill of supply as per the Notification No. 45/2017 of Central Tax if it deals in both exempt and taxable services/goods.

Aggregate invoice

If a seller issues multiple invoices to an unregistered buyer, each less than Rs.200, he/she can issue a single invoice, summing up all the amounts. This is called a bulk or aggregate invoice.

Debit and credit note

Such commercial documents are issued when there is any discrepancy found in a previously issued tax invoice for a product or service.

A debit note is issued when any of these 2 conditions arise.

The formerly issued tax invoice displays a lower taxable value than the correct amount.
The amount of tax charged in this tax invoice is lower than the actual value.

On the other hand, a credit note is issued for the opposite reasons.

The taxable amount or tax charged in the invoice is higher than the correct figures.
There is a discrepancy in services or products provided, and the buyer returns them and asks for a refund.

Besides the above types of invoices in GST, there are several other documents and vouchers relating to such transactions, depending on several conditions.

Revising invoices issued before GST

There can be several instances of getting a wrong GST invoice bill issued. As a solution, there is a provision for revising such tax invoices before.

All sellers need to apply for provisional registration before they get the permanent certificate. Any tax invoice issued from the date of GST implementation till the date on which permanent registration certificate is issued must have a revised invoice under GST issued against them. This must be done within 1 month from the date of issue of the registration certificate.

This revised tax invoice under GST must have “Revised Invoice” mentioned on it, along with all the mandatory details of a tax invoice as already discussed.

How many copies of invoices should a supplier issue?

Since proof of transaction should remain with all parties involved, there are a specific number of invoice copies issued depending on the type of supply.

1. For goods

The dealer must produce 3 copies of the GST invoice bill issued.

Original copy: Received by the buyer
Duplicate copy: Received by individuals delivering the products from the supplier’s end to the recipient’s end
Triplicate copy: Must be kept with the dealer

2. For services

In the case of services, the issuer needs to arrange 2 copies of the invoice.

Original copy: Sent to the buyer
Duplicate copy: Remains with the supplier for later reference.

There you go! These are the relevant details regarding a GST invoice bill. If you are a registered dealer, ensure issuing such documents to avail Input Tax Credit (ITC). If you are not GST-registered yet, consider getting a certificate to help your business benefit from such provisions.

Frequently Asked Questions

✓ What are the specifications for the issuer’s signature in the case of e-invoicing?

When issuing a GST invoice online, a supplier must upload the invoice’s JSON on the Invoice Registration Portal (IRP). Now, the Invoice Registration Number is generated by IRP, and it will digitally sign the JSON using its private key. Once signed, it will become a valid e-invoice, and the IRP will send this document to the e-way bill system and GSTIN.

✓ Can I issue a GST invoice bill before the date of providing services?

Yes, you can issue a tax invoice before the services are rendered. The only mandate is that the date of issue must not cross the deadline succeeding the date of service supply.

✓ Which sectors are considered special cases when it comes to GST invoicing?

Banking, goods, transport agencies, and passenger transport are three of the sectors where the government allows certain relaxations when it comes to GST invoicing. Relaxations differ in each of these sectors.

✓ Under which conditions is a supplementary invoice issued?

A supplementary invoice needs to be issued when:

There is a change in taxable amounts or tax rates.
The buyer returns the products due to low quality.
The buyer claims a refund for the returned items.

✓ How does the invoice date differ from the due date?

While invoice date is the date on which this document is created, the due date refers to the deadline within which the amount on this invoice must be paid.